An economics major "definition" of capital

[Black Sheep]

Was this:

[after a long, frustrating discussion where we used same words to describe different things]

Me: Whoa,let's back up.For starters,how do you define capital?
He:Capital is anything that you can use, to achieve more wealth.
Me:What? So if i take this glass of Ouzo and smash your head with it and steal your wallet,the glass is capital?
He:Exactly.
Me: [Rage]

Isn't it ridiculous?Firstly, is it even defined in any textbook like this?Secondly, when a definition is so general that includes everything in some context,doesn't that devalue the definition / the concept it tries to define?

[Dumb]

Are they passing in econ? :confused:

[Savage]

Mind blowing news flash: Capital in Marx is not the same as in bourgeois economics.

[Die Neue Zeit]

Mind blowing news flash: Capital in Marx is not the same as in bourgeois economics.

Capital in Capital is not the same (process) as in much of the rest of Marx (proprietary or partnership equity). :p

[Savage]

classic DNZ post

[Yazman]

classic DNZ post

If you want to thank a user, then use the "thanks" button. Otherwise, if all you're going to do is make a post like this that contributes nothing to the thread, then don't bother posting. Consider yourself warned.

This post constitutes a warning to Savage for spam.

[ar734]

Was this:

[after a long, frustrating discussion where we used same words to describe different things]

Me: Whoa,let's back up.For starters,how do you define capital?
He:Capital is anything that you can use, to achieve more wealth.
Me:What? So if i take this glass of Ouzo and smash your head with it and steal your wallet,the glass is capital?
He:Exactly.
Me: [Rage]

Isn't it ridiculous?Firstly, is it even defined in any textbook like this?Secondly, when a definition is so general that includes everything in some context,doesn't that devalue the definition / the concept it tries to define?

Actually, robbery, murder, slavery, etc. are types of "primitive accumulation" of capital, as explained by Marx. The question for your friend is, "Now that I've got your money, are you going to work for me at bare subsistence wages or are you going to starve? Those are your two choices. If you try to leave I will have you and your family thrown in prison."

[Armchair War Criminal]

Mind blowing news flash: Capital in Marx is not the same as in bourgeois economics.Yeah, also, neoclassicism doesn't define capital as just anything that gets you more resources, but what Marxists refer to as constant capital (or its equivalents under other modes of production) or the means of production, depending on the model in question.

[Sixiang]

Was this:

[after a long, frustrating discussion where we used same words to describe different things]

Me: Whoa,let's back up.For starters,how do you define capital?
He:Capital is anything that you can use, to achieve more wealth.
Me:What? So if i take this glass of Ouzo and smash your head with it and steal your wallet,the glass is capital?
He:Exactly.
Me: [Rage]

Isn't it ridiculous?Firstly, is it even defined in any textbook like this?Secondly, when a definition is so general that includes everything in some context,doesn't that devalue the definition / the concept it tries to define?

I suppose it might depend on what school of bourgeois economics he subscribes to. My Keynesian macroeconomics teacher I had last year defined capital as any goods used for production. However, he didn't include land or labor as capital like Marxists do.

[xub3rn00dlex]

I suppose it might depend on what school of bourgeois economics he subscribes to. My Keynesian macroeconomics teacher I had last year defined capital as any goods used for production. However, he didn't include land or labor as capital like Marxists do.

My AP Micro teacher back in hs defined it just the way yours did. I don't know his politics, but he was very critical of bourgeoise economics they were teaching. He would teach us laws, like supply and demand or marginality, and then go on to say it was all bullshit lol.

In regards to supply and demand he always said the law states the 'optimal' production level were the intersection of the two, but that it was bullshit because demand was highest at the lowest price, so why the fuck couldn't production be as well?

His exact words. He was a pretty cool dude, taught for fun because his wife worked exchanging currencies, so he was set. He made us play a game in class where we imitated oil oligarchs and were supposed to agree to a price. Said he'd give every kid $100 if we won, and he had the cash in hand. Needless to say, he's been doing it for 5 years and never lost.

[Die Neue Zeit]

classic DNZ post


Yeah, also, neoclassicism doesn't define capital as just anything that gets you more resources, but what Marxists refer to as constant capital (or its equivalents under other modes of production) or the means of production, depending on the model in question.

To answer the original question more bluntly, capital in "economics" should strictly be any of proprietary, partnership, or shareholder equity.

The problem is that finance blurs this to also include long-term debt, most notably in discussions on Weighted Average Cost of Capital. Then, there are long-term assets to consider as well. When considering other subject areas, this is understandable, because there are financial instruments that are equity in form but long-term debt in substance (like certain kinds of preferred shares) and classified according to the latter, and vice versa.

So no, overall, you won't get a universal definition of "capital."

[RichardAWilson]

"Wealth available for use in the production of even more wealth."

In classical economics, capital is one of three factors of production, the others being land and labour. Goods with the following features are capital:

It can be used in the production of other goods (this is what makes it a factor of production).

It is human-made, in contrast to "land," which refers to naturally occurring resources such as geographical locations and minerals.

It is not used up immediately in the process of production, unlike raw materials or intermediate goods.

A Fundamental Law of Capital is that it contributes to the creation of more wealth. Even Commercial and Speculative Capital creates more wealth: In that it finances increased production.

As such: The glass isn't capital.

[Sixiang]

My AP Micro teacher back in hs defined it just the way yours did. I don't know his politics, but he was very critical of bourgeoise economics they were teaching. He would teach us laws, like supply and demand or marginality, and then go on to say it was all bullshit lol.

In regards to supply and demand he always said the law states the 'optimal' production level were the intersection of the two, but that it was bullshit because demand was highest at the lowest price, so why the fuck couldn't production be as well?

His exact words. He was a pretty cool dude, taught for fun because his wife worked exchanging currencies, so he was set. He made us play a game in class where we imitated oil oligarchs and were supposed to agree to a price. Said he'd give every kid $100 if we won, and he had the cash in hand. Needless to say, he's been doing it for 5 years and never lost.

lol. Sounds hilarious. My teacher was obsessed with Keynes like he was a god. He raised cows and horses on a farm out in the boondocks and knew absolutely everything you could possibly know about the JFK assassination and taught a class on it at a local college alongside intro to macroeconomics. Wacky dude.

Oh right, off topic. Yeah, DNZ said it best.